Green bond and ESG bond certification and second-party opinions expand Scope’s increasing suite of ESG services including impact measures. Since 2020, Scope has been offering ESG Impact Review, providing an impact score and a proxy monetary value on corporates’ ESG externalities, based on a quantitative macroeconomic model.

ESG Impact Review incorporates the impacts of companies’ global supply chains from more than 300 sectors in 45 countries and regions. Scope is also offering supplementary services, including issuers’ alignment with the EU Taxonomy, the ‘Do No Significant Harm’ requirements, the UN’s Sustainable Development Goals and the 2015 Paris Accord.

“The rapid world-wide growth of labelled ESG debt issuance across all borrower universes – sovereigns, government and supranational agencies, financial institutions and corporates – is driving parallel demand for independent opinions, certification, assurance and verification as institutional investors and issuers focus on meeting ever-pressing ESG demands from clients,” said Diane Menville, head of ESG at Scope. “ESG criteria are already acting as market compasses and will become tomorrow’s standards. As such, they constitute a de facto sovereignty issue for markets and countries.”

The Climate Bonds Standard and Certification Scheme is a science-based multi-sector labelling scheme for green bonds and other green debt products. It is used by bond issuers, governments, investors and the financial markets to prioritise investments which contribute to addressing climate change. Rigorous scientific criteria ensure the scheme is consistent with the goals of the Paris Climate Agreement to limit warming to under 2 degrees.

As an approved verifier under the scheme, we will check an issuer's upcoming bond against the standard as well as sector-based technical criteria. If the bond complies, we will verify that the bond can be marketed to investors as a Certified Climate Bond.

Scope’s second-party opinion (SPO) service spans the family of labelled debt instruments: green bonds, social bonds, sustainability bonds, and sustainability-linked (KPI-linked) bonds. Scope’s analysis is aligned with the core components of the Green Bond Principles, the Social Bond Principles, the Sustainability-Linked Bond Principles and the Sustainability Bond Guidelines published in the sustainable finance section of the International Capital Market Association’s website.

For SPO reporting, Scope has created a scoring model, with five levels:

• Three green leaves means ‘transformative environmental contribution and strong alignment with all relevant market standards’
• Two is ‘significant environmental contribution and alignment with selected market standards’
• One means ‘environmentally friendly but limited contribution to long-term transformation’.
• Below that, one grey leaf means ‘no significant environmental impact’
• A brown leaf means ‘negative environmental impact’.

“In the bond pre-issuance phase, we work with issuers across sectors as well as underwriters to prepare External Reviews, using issuance frameworks or individual bond documentation as a basis,” Menville said. “Once an instrument has been issued, we can engage with borrowers to prepare impact and use-of-proceeds monitoring reports.”